Can O&G infrastructure support Deepwater Mining Operations?
by Mark Lamb the author of "Compass and a Map"
Does the offshore oil and gas industry have the potential to support and facilitate large-scale deepwater mining operations?
In today's deep water mining debate, this simple question is not being asked, probably because the answer is considered irrelevant...yet.
However, logistics in all its guises have too often proven to be the critical factor in winning a matchup, so rather than assume that in this case logistics is an implicit success, Futureoftheocean asked a very experienced professional of offshore industry, Mr. Mark Lamb, author of "Compass and a Map - A Guide for the International Business Development Manager" to give us his perspective on this issue.
Any financially viable deepwater oil and gas operation will inherently be large-scale
The Futureoftheocean initiative invited me to express my thoughts on the Offshore Oil and Gas Industry's (hereinafter referred to as the ‘Offshore Industry’) potential to adapt its technology, offshore vessels, and expertise to deepwater mining operations (DWM). In this discussion, I assert that the Offshore Industry's future involvement hinges on large-scale subsea mining rather than smaller-scale operations. Any financially viable deepwater oil and gas operation will inherently be large-scale. Additionally, I highlight that the deepwater oil and gas industry, including the dredging industry, has developed much of the technology used in DWM operations. Future large-scale operations will rely on technology developed by the Offshore Industry.
This article aims to provide a non-technical overview of the challenges faced by deep-sea mining and the potential for large-scale involvement of the Offshore Industry. My perspective is informed by a 50-year career experience in financial, management, business development, and operations roles with leading US and international companies serving the Offshore Industry.
When referring to the 'Offshore Industry,' I include all its sectors: oil and gas producers, vessel owners, subsea contractors (diving companies), deepwater drilling operators, dredging contractors, and engineering and project management firms. With this context, please consider the following:
What minerals and metals are the focus of DWM, and where are they found?
My experience with subsea mining relates to phosphate rock deposits off the southern Pacific coast of Baja, Mexico, where my company proposed using large grabs and suction hopper dredges for mining. These phosphate deposits, a critical component of fertilizers, are located on the Mexican continental shelf at shallow depths of 50 to 100 meters. However, these mining methods are not technically feasible for extracting economic quantities of minerals, metals, and rare earth elements at depths beyond 4,000 meters, where polymetallic nodules, the targeted materials, are typically found. This water depth is within the operating depth range of deepwater oil and gas operations. For example, the deepest water in which an offshore oil well was drilled is Total’s Angola's Block 48 in a water column depth of 3,628 meters.
Polymetallic nodules are rock-like potato-sized deposits sitting on the sea floor that are the main focus of deepwater mining operations, containing cobalt, manganese, titanium, nickel, copper, iron and rare earth elements. Significant nodule deposits are found in the Pacific Ocean at depths exceeding 4,000 meters, particularly in the Clarion-Clipperton Zone (between Mexico and Hawaii) and near the Cook Islands, which exhibit high nodule densities, estimated at 30 to 50 kg per square meter and are primarily composed of cobalt. However, nodules in the Clarion-Clipperton Zone contain only small amounts of cobalt. The composition of nodules varies widely across different regions; however, known nodule density is typically around 20 kg per square meter.
In the following sections, I will discuss the current status of small-scale deepwater mining, the industry's challenges, and the opportunities to further leverage Offshore Industry technology for large-scale operations.
What is the status of DWM operations today? Who are the leading players?
Interestingly, as early as 1978, a collaboration between an international consortium of US and Dutch companies and Lockheed Missiles and Space Company led to the testing of a prototype Deep Water Mining (DWM) system in the Pacific Ocean using the drillship Glomar Explorer, a vessel with a notably intriguing history. The evolution of DWM technology has thus spanned over five decades, consistently advancing industry technology while navigating the complexities of evolving international permitting requirements.
Deepwater mining technology continues to advance, and today, a handful of companies are actively engaged in developing and testing technology for harvesting polymetallic nodules from the ocean depths. These companies have designed and are experimenting with various nodule harvesters and riser systems at water depths up to 5,270 meters by an Indian operator in the Central Indian Ocean. Other activities are being conducted offshore Norway, the Cook Islands, Japan, Sweden, India, Saudi Arabia, American Samoa, Papua New Guinea, and Chile. DWM activities are principally within these countries’ Exclusive Economic Zones. Of these, Norway has taken a leading role in the global race to mine the ocean floor for metals in high demand as we transition away from fossil fuels.
Smaller companies dominate the DWM sector; however, significant Offshore Industry players are well-positioned to enter the DWM market. These companies include leading dredging contractors, major deepwater installation and engineering contractors, and deepwater drilling contractors. These Offshore Industry companies are at different stages of advancing deepsea mining methodologies by utilizing their core business expertise. One example is the Allseas investment in the Hidden Gem, a modified ultra-deepwater drillship with a 4.5 km riser to lift and transport nodules from the ocean floor to the surface. The vessel is equipped with a nodule harvester that has been designed and built in-house. In October 2022, the Hidden Gem and its DWM harvesting systems completed successful trials in the Pacific.
Concurrently, China is striving to establish dominance in the deep-sea mining sector by leveraging its control over essential terrestrial mineral supply chains and making substantial investments in DWM technologies, mainly focusing on resources in the Pacific Ocean.
A crucial factor for the expansion of the deep-sea mining industry is the permitting requirements for mining in international waters, where most vital minerals are located. The United Nations' International Seabed Authority (ISA) oversees these permits and is expected to finalize regulations by 2025. These regulations will dictate how or if countries can engage in DWM in international waters. The main challenge in securing permits will be ensuring the environmental protection of marine life. While countries can issue permits within their national waters, international waters offer the most promising economic opportunities for DWM.
Environmental Concerns vs Resource Necessity: The DSM dilemma
The deep-sea mining industry continues to make significant technical and operational progress while awaiting international legislation that may delay or severely restrict operations in international waters. At the forefront of DWM development is protecting the marine environment, as the potential impact on aquatic ecosystems can be significant. The industry anticipates that initial International Seabed Authority (ISA) regulations may result in a "precautionary pause" on mining activities until further research is conducted.
Looking at the long-term balance between environmental impact and human needs, a scenario arises where terrestrial resources are depleted, and alternative technologies and recycled resources are insufficient to meet energy demands. This situation mirrors our current reliance on oil and gas, where an immediate and significant reduction in fossil fuel production and consumption would drastically alter our way of life.
In this discussion, terrestrial and subsea sources have been considered the primary providers of essential metals, minerals, and rare earth materials. However, a third potential source, particularly for rare earth materials, could be extraterrestrial. Elon Musk's Starship technology aims to advance space exploration and enable humanity to become a multi-planetary species. Despite this, Musk doubts the economic feasibility of mining rare earth materials from Mars, citing the high logistics costs of transporting substantial quantities back to Earth. Another potential extraterrestrial source is asteroid capture, which, while facing similar logistical challenges as planetary sources, may be technically more feasible than extracting heavy metals from a planet's surface.
Subsea mining remains the only economically viable alternative to terrestrial resources. Environmentally acceptable operational decisions must be rooted in an honest and ethical decision-making process. Exploration sites should be thoroughly studied, akin to the archaeological examination of historical remains found during land excavation for surface mining projects. Once exploration is complete, mining operations can begin depending on the site's significance. Similar to offshore facility decommissioning and onshore surface coal mining, consideration should also be given to the potential for restoring certain aspects of the site post-exploitation.
The offshore industry is a consortium of multiple centers of excellence...
Offshore Industry hubs, including Houston, Milan, Paris, Aberdeen, The Netherlands, Abu Dhabi, and Rio de Janeiro, are the primary resource centers for international offshore oil and gas producers. These hubs are bases for hundreds of companies that support the oil and gas industry with expertise, vessels and resources in engineering, installation, production, and ongoing IRM. For instance, in my hometown of Houston, many companies and professionals collaborate to develop deepwater production technology and execute projects globally. Major oil companies, including ExxonMobil, Chevron, BP, Shell, and ConocoPhillips, have established large campuses in Houston to centralize their resources and expertise. Surrounding these centers are hundreds of companies supplying technology, vessels, engineering, and other resources necessary for global project development, installation, and execution. This vast concentration of knowledge and resources enables efficient and cost-effective project engineering, installation, and production. Resources and expertise are pooled, and companies collaborate closely to deliver projects, working together perhaps more closely than in other industries. This spirit of working together and pooling resources will be critical to the success of large-scale deepwater mining should the sector mature.
The Offshore and Space Industries will continue to develop new technology that will be utilized in DWM
The technology developed for deepwater activities and space exploration shares several complexities. These fields push the limits of human ingenuity and engineering, requiring advanced solutions to operate in some of the most extreme and unforgiving environments known to humanity. Small-scale DWM has benefited from technologies developed in these industries, particularly robotics and automation. In deepwater oil and gas operations, remotely operated vehicles (ROVs) and autonomous underwater vehicles (AUVs) are used for subsea installation, inspection, repair, and maintenance. Similarly, the space industry employs robotic systems for spacecraft and planetary exploration to conduct experiments and navigate planetary terrains. Other shared technological areas of the Space and Offshore Industry include advanced materials, data analytics and real-time monitoring, seismic imaging, remote sensing, AI and machine learning, and fuel and propulsion technologies. These shared technologies highlight the interdisciplinary nature of engineering and innovation, where advances in one field significantly benefit the other. DWM will continue to gain from ongoing developments in deepwater oil, gas, and space technology.
Based in Houston, Oceaneering exemplifies how technology developed for deepwater operations can be adapted for space applications. With a history of collaboration on various projects, Oceaneering's Space Systems division has leveraged its expertise in underwater robotics to create advanced robotic systems for space. The company designs, manufactures, maintains, and tests these systems for the space industry, contributing to projects like the Robonaut 2 robot and the Gold-2 latching device for external payload support. Oceaneering's application of underwater expertise has enhanced the safety, efficiency, and success of human spaceflight and robotic missions. DWM will continue to benefit from subsea and space technologies developed by innovative companies like Oceaneering.
Another example of technology sharing between the space industry and Earth operations, though not directly related to the Offshore Industry, is the collaboration between Elon Musk's companies, Tesla and SpaceX. These synergies are evident in battery technology, materials engineering, software and data management, shared facilities, human resources, and leadership. Tesla and SpaceX illustrate how terrestrial and extraterrestrial developments can be synergized - an excellent example of how space and subsea operations mutually benefit from each other's advancements.
DWM and space operations are similar in many ways, but each has differing risks and technical challenges
The primary risks associated with DWM and space operations arise from different pressure-related effects—implosion and explosion at low temperatures—yet they share similarities in other respects. The technical challenges of deepwater hyperbaric decompression at depths exceeding 4,000 meters, where polymetallic nodules are typically located, are significant and distinct from the challenges posed by the absence of gravity in space. These contrasting environments present unique technical challenges, and in many respects, human intervention is more practicable in outer space than in deep-sea operations. While DWM and space operations share several similarities, working on the deep seafloor may be more technically challenging than conducting operations in space.
The Earth’s ocean floor is essentially an unexplored frontier.
Humankind possesses more knowledge about the surfaces of the Moon, Mars, and other planets than about the topography and bathymetry of the ocean floors. Approximately 70% of Earth's surface is covered by water. According to the General Bathymetric Chart of the Oceans, only 18% of all grid cells in the compilation contain any bathymetric data. Only 9% of these grid cells contain modern multibeam sonar data, offering higher resolution and more detailed mapping. In summary, most ocean floors have never been measured for depth. The vast majority of the five ocean basins remain largely unexplored frontiers. The potential for discovering valuable metals, minerals, and rare earth materials is unknown, with the possibility of vast resource volumes.
Will long-term demand for terrestrial or deepwater minerals, metals, and rare earth materials exist?
The primary motivation for deep-sea mining is the need for minerals such as nickel, cobalt, copper, and manganese, which are crucial for electric vehicle batteries and clean energy technologies. The International Energy Agency (IEA) forecasts a 30% increase in demand for these critical minerals by 2040. Other projections suggest that global demand for some of these minerals could rise by as much as 400% to 600% in the coming decades as the world increasingly relies on wind and solar power, electric vehicles, batteries, and other zero-carbon technologies. Suppose terrestrial sources of these resources become depleted, and alternative metals or minerals for battery power are not developed. Also, assuming that recycling is insufficient as a long-term source, deep-sea mining will be the only viable alternative on Earth to meet the growing demand. As battery technologies advance, some suggest that deep-sea mineral deposits might become less attractive as alternative technologies that don't depend on these minerals become more widespread. Additionally, when considering sources of cobalt, which is essential for battery technology, it's important to address the human rights, risks and concerns linked to cobalt mining, particularly the use of child labor.
Large-scale deepwater mining will require the full support of the Offshore Industry
Large-scale deepwater mining will require the full support of the Offshore Industry, which continues to develop technology for deepwater oil and gas production, can readily access large sums of capital, and is financially equipped to manage the inherent risks of DWM. Similar to the petroleum industry, smaller organizations often succeed in developing niche market technology. A notable example is the former Mitchell Energy and Development in Houston, led by George Mitchell, who pioneered the commercial viability of shale gas production using hydraulic fracturing technology. Larger companies tend to acquire smaller firms that develop niche technology, much like Mitchell's shale production technology, which has been fully integrated into the petroleum industry, enabling the recovery of previously unrecoverable shale gas and crude oil deposits. A similar pattern of technology development and acquisition is likely to occur with smaller DWM operators who develop essential technology for subsea mining.
As emphasized throughout this article, the growth of large-scale DWM, assuming terrestrial sources cannot meet demand, largely depends on favorable international legislation governing operations and the environmental community's acceptance of deep-sea production.
Taking a SWOT ‘at’ future Offshore Industry participation in large-scale DWM
I have provided a broad overview to give readers a general understanding of subsea mining, its challenges, and how the Offshore Industry might engage in future large-scale operations. As the saying goes, a SWOT Analysis is just the starting point, much like the very early stages of the deepwater mining industry. The analysis below highlights the strengths, weaknesses, opportunities, and threats associated with DWM.
Summary and Conclusion
- Firstly, one might conclude that current investments in deepwater mining technology aim to strategically position technology, force the development of regulations, and develop operational and commercial expertise. This process will ensure a reliable supply of rare minerals essential for green energy equipment and devices, assuming terrestrial sources become depleted or are no longer cost-effective to extract. The DWM industry strives to demonstrate that operations can be conducted safely and environmentally responsibly, using the best technology while achieving acceptable returns on investment.
- Secondly, a significant unknown affecting the future of DWM (and the Offshore Industry’s involvement in large-scale projects) is the development of new battery and power technologies that do not rely on large quantities of subsea minerals.
- Thirdly, another significant uncertainty impacting the viability of DWM is the future ability to profitably and efficiently recycle large quantities of terrestrial-sourced minerals used in batteries and other mineral-dependent power sources.
- Fourthly, the most critical factor for DWM's long-term success is maintaining environmentally safe and socially acceptable operations. Environmental watchdogs will closely monitor DWM activities, and to thrive, the industry must uphold the highest standards of safety, health, environment, and quality (SHEQ).
- Fifthly, the final decisions of the UN’s International Seabed Authority (ISA) in 2025 will be crucial, as they will determine how or if countries can pursue deep-sea mining in international waters.
In summary, the involvement of the Offshore Industry in large-scale DWM projects hinges on the outcomes of these five factors. Today, several leading Offshore Industry operators are proactively assessing their future participation in DWM, in which they will play a vital role in developing large-scale DWM.
Resources:
The following articles are excellent resources for a more in-depth analysis of DWM and current activities.
"What We Know About Deep-sea Mining — and What We Don’t"
February 23, 2024, By Oliver Ashford, Jonathan Baines, Melissa Barbanell and Ke Wang
Several recent articles by Phillip Gates:
o SUBSEA MINERAL HARVESTERS
o 8 Subsea Mineral Harvesters
o 9 Countries developing Subsea Minerals in their EEZs
o Nodules in Japanese EEZ at MinamitorishimaX
About Mr. Mark Lamb:
Mr. Lamb, CPA (Ret), is the author of "Compass and a Map - A Guide for the International Business Development Manager." He began his career at Ernst and Young (EY) in Houston, Texas, as a Certified Public Accountant, primarily serving clients in the maritime and petroleum industries. This experience paved the way for a 40-year career in the maritime industry, where he specialized in international business development for leading offshore and inland companies.
For more information about Mr. Lamb, his services, and his book, please visit: